Godrej Industries Ltd

Dear Shareholders,

I am delighted to share with you the events and developments of your Company during the course of the Financial Year 2023-24. The year gone by is representative of the value Godrej Industries continues to create for all its stakeholders.

As a conglomerate with diverse business interest, growth at consolidated level is pursued through competitively growing your Company's core businesses, building an environment to achieve transformation while also nurturing and investing in emergent businesses of the future. This approach of your Company's business strategy is captured in the approach called CREATE which stands for:

I would like to summarize the performance for each dimension of your Company's CREATE strategy:

GCPL delivered a strong performance in all the four quarters of FY2024, despite challenging conditions across markets. The full year organic volume growth was 7% for GCPL's consolidated business.

GCPL continues to be focused on driving volume-led growth along with healthy investments in its brands. GCPL will continue to launch new products in accordance with its purpose to bring goodness of health and beauty to consumers.

GCPL continues to strengthen its balance sheet and recently completed re-organization of its East Africa business. In the current financial year there was an exceptional accounting charge (non-cash in nature) of 2,378 crore.

The consumer business is on track in its journey to reduce wasted cost and to drive profitable and sustainable volume growth across its portfolio though category development.

After an exceptional year in FY2022-23 for our Chemicals Business and the Chemicals Industry as a whole, our Chemicals business faced several challenges in FY2023-24. The total revenue of the business stood at 2,696 Crore and operating profit of the business stood at 261 crore. The larger Chemicals industry faced a difficult year due to sluggish demand mainly due to destocking of excess inventory accumulated by customer during COVID and post covid disruptions. Geopolitical issues impacted the growth of export business. Supply chain disruptions due to issues in Red Sea has increased freight cost and also the transit time. All these factors impacted the Chemicals Business in the current fiscal year. However, on a relative scale, the business did relatively well.

We continue to ensure that our Chemicals Business is both sustainable as well as profitable. We continue to accord the highest importance to safety. Several initiatives taken by the Business resulted in energy and operating efficiencies. I am happy to share that the Chemicals Business received several awards and recognition. Our Ambernath Factory received the prestigious GreenCo certification with Gold rating, our Ambernath Factory has been recognized for Best Implementation of Responsible care, Epsilon Carbon Certificate of Merit by ICC. Both our Valia and Ambernath Factories have been recognized for 5S Initiatives.

Godrej Properties delivered a robust and well-rounded performance in FY24, registering its best-ever bookings, cash collections, earnings, and deliveries as well as a strong year for business development. The residential real estate sector in India has been strong over the past three years and we believe that the sectoral tailwinds will continue over the next few years. The significant levels of business development that GPL executed in the previous years on favourable terms allowed GPL to scale its bookings by 84% to 22,527 crore in FY24 and become the largest publicly listed real estate developer in India be sales.

Godrej Properties has deeply focused on sustainable development. GPL's committed that all of its developments would be third party certified green buildings. Godrej Properties has been added to the Leadership Index of Dow Jones Sustainability Index (DJSI) in the emerging markets category list for the year 2023. GPL received a rating of 98/100 by the Global Real Estate Sustainability benchmark (GRESB).

In FY24, GPL received 95 awards. Taj The Trees won the Sustainable and Environment conscious hotel of the year award in luxury hotel segment at the GM & ESG summit organized by Hotelier India magazine.

The financial year 2023-34 augured well for Godrej Agrovet in terms of robust surge in profitability over FY 2022-23. This growth in profitability was primarily driven by exceptional performance of domestic crop protection business, structural turnaround of dairy business, market share gains in Animal Feed and robust volume & margin growth in branded products in our poultry business.

Domestic crop protection business delivered stellar performance primarily driven by higher volumes of in-house and in-licensed products. Animal Feed business recorded double-digit growth in volumes in cattle feed and fish feed categories and significant increase in segment margins led by softened commodity prices and higher realizations in the aforementioned categories. Dairy business achieved remarkable turnaround and returned to profitability. This was driven by focused efforts on improving operational efficiencies and improved milk spread. The Poultry business also recorded robust improvement in profitability on the back of higher live bird prices and increase in volumes of branded product portfolio. GAVL's Vegetable Oils business margins was lower as compared to FY23.

As a Group, your Company believes in inclusive growth that aims at enhancing the competitiveness of the businesses while simultaneously advancing the economic and social conditions of the communities in which it operates. This focus is implemented Group wide through the ‘Godrej Good and Green' initiative.

Our companies have a high focus on environmental performance that's now backed with strong risk management processes and governance that we've built over a decade. We are working to get into the leadership position. All our companies have committed towards Science Based Targets to further strengthen our climate action response.

Over the many years, your Company has incubated new businesses and grown them successfully. We believe that there is a good potential for housing finance and Non-banking finance business in our Country. Looking at this opportunity, these businesses will be nurtured under your Company. Godrej Capital Limited (GCL), a subsidiary of your company, is a Non-Banking Finance Company

- Core Investment Company (NBFC-CIC) (exempt from registration). GCL is the holding company of Godrej Housing Finance Limited (GFHL), a Non-Banking Finance Company – Housing Finance Company and Godrej Finance Limited (GFL), a Non-Banking Finance Company.

During the year, GHFL sanctioned loans amounting ~ 2,632 Crore and had Asset Under Management (AUM) as on March 31, 2024 at 5,463 Crore as compared to 3,812 Crore as on March 31, 2023.

During the year GFL sanctioned loans amounting 3,877 Crore and had Asset Under Management (AUM) as on March 31, 2024 at 4,842 Crore as compared to 1,345 Crore as on March 31, 2023.

We believe that these new businesses will create overall value to the Stakeholders.

To conclude, we had a good year. We remain encouraged and confident of achieving our long-term objectives of inclusive, sustainable and profitable growth. As we look ahead, I feel confident of strong growth in the medium to long term.

I am confident that our disciplined strategy, prudent approach, focus on agile execution and our committed team will enable us to improve performance further and create greater shareholder value.

I would like to take this opportunity to thank all our employees for their contribution in the continued success of Godrej Industries. I would also like to extend my gratitude towards our business partners, associates, vendors and also the Central, State governments and government agencies for their sustained support. I would also like to express my sincere appreciation to all of our shareholders for your continued faith, trust, encouragement and support.

Yours sincerely,

Chairman and Managing Director Godrej Industries Limited